Required
You are required to produce a report consisting of two parts.
In Part 1, you should explain the three forms of market efficiency put forward by Fama (1970). (15 marks)
In Part 2 you should proceed with critically discussing the evidence for and against the theory that stock market share prices fully and fairly reflect all known information. Give your own reasoned evaluation of the balance of this evidence and your views on whether it is possible to exploit market inefficiencies to consistently make abnormal returns by trading in shares using publicly available information. Go on to explain the implications for investors and companies if it were concluded that the evidence supporting the efficient stock market hypothesis was very persuasive as far as past price and publicly available information is concerned. (85 marks)
